Hothi Samat Keshwala Vs ITO (ITAT Rajkot)
Demonetisation Cash Deposits- When Sources Are Mixed But Not Bogus—Tribunal Opts For Reasonable Estimate
The appeal before Tribunal was delayed by 252 days. The delay arose because the order passed by CIT(A) was uploaded only on the portal & was not communicated by Assessee’s advocate. Tribunal noted that the Assessee acted with reasonable diligence, the lapse occurred due to counsel’s mistake, & relying on Ramlal & Chhotelal v. Rewa Coalfields Ltd. & Concord of India Insurance Co. Ltd., condoned the delay.
On merits, the AO noted that Assessee had deposited cash of ₹18,23,500 during demonetisation period but explained only ₹23,500 as savings, treating balance ₹18,00,000 as unexplained money taxable u/s 69A. CIT(A) upheld the addition.
Before Tribunal Assessee demonstrated that deposits came from agricultural loans received from multiple persons, withdrawals from maturity proceeds of fixed deposits, past savings, & amounts withdrawn earlier for domestic use. Additional evidences were filed before CIT(A) & remand report submitted by AO was not adverse. Tribunal observed that FD maturity withdrawals, agricultural loans & other sources were supported by records & broadly matched with deposits.
However, Tribunal also found that Assessee could not fully reconcile drawings, personal expenses & all cash movements. Considering the mixed nature of evidence, Tribunal held that applying a net-profit rate would meet ends of justice. It therefore restricted the addition to 10% of ₹18,00,000, i.e., ₹1,80,000, taxable at normal rates, & expressly stated that this estimation shall not operate as precedent for any other year. Resultantly, the appeal was partly allowed.
